Details on the next Affordable Homes Programme announced

The government has announced the prospectus for the 2021-26 Affordable Homes Programme (AHP). It plans to build up to 180,000 new homes with investment confirmed in the Budget in March – £7.5bn will be distributed via Homes England and the government will negotiate with the Greater London Authority on the use of the remaining £4bn for London.

We’ve welcomed the confirmation that money will be available for social and affordable rent in our initial response, and provided further detail on the key announcements below.

You can read the announcement in full on the government’s website.

Homes for rent

• The 2021-26 AHP will include around 50% of homes for discounted rent. Importantly, social rent has been specifically referenced in today’s announcement.
• There is currently no detail on the grant rates on offer in different parts of the country or how many social rent homes will be supported through the programme.
• 10% of homes built through the programme will be for supported housing. We are pleased that the government has announced this in acknowledgment of the vital role these homes are playing through the pandemic.

Homes for affordable home ownership

The remaining 50% of homes will be built for affordable home ownership – we understand the majority of these will be shared ownership, which is welcome.

Shared ownership

The government has announced that it will introduce a new model of shared ownership that:

• Reduces the minimum initial share people can buy from 25% to 10%.
• Allows people to buy additional shares in their home in 1% instalments, with heavily reduced fees.
• Introduces a 10-year period for new shared owners where the landlord will cover the cost of any repairs and maintenance.

There will be a consultation on how this new model is implemented and we will be looking to influence the detail to ensure shared ownership remains a viable product for our members to build. Further information is available on the government’s website.

Right to Shared ownership

The government has also committed to introducing the Right to Shared Ownership on most of the rented properties built through the programme, with some exclusions for supported housing, homes in rural communities and a very small proportion of homes where there are specific legal barriers. We understand this would be based on the new shared ownership model set out above.

Our engagement and next steps

We have invested heavily over the last ten months in building a positive and productive working relationship with the Secretary of State, Housing Minister and senior officials. The tone of today’s announcements suggest that the government understands the need to invest in genuinely affordable homes and the essential role housing associations will play in getting the country back on track.

However, we are concerned that the proposed changes to shared ownership and the new Right to Shared Ownership may present some challenges to delivering new homes, and we plan to engage constructively with the government to outline these concerns in more detail.

We will update our website soon with more detail on the Homes England prospectus when it becomes available. We are also planning a member engagement programme to discuss today’s announcement, including upcoming chief executive forms, meetings with development directors and a webinar.

If you have any questions in the meantime, please get in touch.